Flipping fraud defendant last of four still headed to trial

Wednesday

Jan 23, 2013 at 12:01 AM

Former Sarasota mortgage broker J. Patrick Brester only one who has not pleaded guilty

By MICHAEL BRAGA

Three of his alleged co-conspirators already have pleaded guilty to flipping fraud and have been sentenced to prison, but former Sarasota mortgage broker J. Patrick Brester appears determined to fight.

A trial date has been set for March 4 and his Tampa criminal defense attorney filed a motion last week objecting to the government's desire to bring up additional evidence against him.

Brester has been charged with artificially inflating the value of nine Vintage Grand condo units by buying and quickly reselling them to former commercial leasing executive Michael Chadwick at higher prices. Federal prosecutors claim that Brester then helped Chadwick to fill out fraudulent loan applications.

Chadwick pleaded guilty in 2010 and has already finished a yearlong prison sentence. Fourteen months after his indictment, the government went after Sarasota real estate investor Matthew Landsman, who also pleaded guilty and is now serving a two-year sentence.

In May, the final member of the conspiracy - Sarasota real estate agent Joshua Unger - pleaded guilty to assisting Brester with the Vintage Grand condos and was sentenced to three years and four months in prison.

All three men are expected to testify against Brester at trial, and Brester's attorney does not have a problem with that.

But documents the lawyer, Victor Martinez, who declined to comment, filed in Tampa's U.S. District Court make it clear he has issues with the government's plan to use Brester's tax returns and 14 examples of alleged mortgage fraud that were not mentioned in the indictment against his client.

"The government may assert that it needs other crime evidence to meet its heavy burden because its proof is based in some measure on the testimony of cooperating witnesses whose agreements with the United States and their own criminal behavior will certainly undercut their credibility," Martinez wrote.

He argued that the government should not be allowed to use Brester's 2006 and 2007 tax returns because they are likely to show that Brester's reported income in those years was different from the income numbers he used to fill out loan applications.

"Since both representations are sworn to be true, then the conclusion must follow that the defendant has made a false statement on either one occasion or the other," Martinez wrote. "The defense would counter that reported income on IRS returns could significantly differ from any stated income on loan applications for the same calendar year because of losses and other legitimate deductions. The defense, at this point, would be defending what would be the equivalent of a separate tax case."

Martinez said such a tax trial would not be relevant to the mortgage fraud case and would simply confuse and waste the jury's time.

As for the other allegedly fraudulent deals, Martinez conceded that examples of fraud in six more Vintage Grand transactions would be relevant, but eight examples of mortgage fraud not connected to Vintage Grand would not be. Those other instances would enable the government to argue that Brester made a habit of lying on mortgage applications.

"The government simply does not need this other crime evidence to prove their case," the lawyer wrote. "This other crime evidence should be prohibited because to allow its introduction creates a real risk of undue prejudice and specifically the risk that this other crime evidence will be viewed only as proof of the defendant's criminal propensity."

In one of the deals that the Herald-Tribune wrote about in its 2009 flipping fraud series, Brester bought a three-bedroom house at 5310 Matthew Court in Sarasota in July 2006 for $275,000 and sold it the same day to Doug Knipper for $385,000. Knipper borrowed $385,000 and defaulted 16 months later.

Knipper has not been charged with any crime.

Martinez argued in his motion that reference to deals like this should be barred from trial: "Evidence of crimes not charged in the indictment are not admissible to show the defendant has a criminal disposition in order to generate the inference that he committed the crimes with which he is charged."

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